CME Delays European Exchange Launch

CME Group Inc.’s CEO Phupinder Gill speaks at the Sandler O’Neill + Partners, L.P. Global Exchange and Brokerage Conference in New York June 7, 2013.

Reuters

CME Group has delayed the launch of its long-awaited European exchange by nearly a month.

The launch, which is the CME Group’s first fully-fledged exchange outside the U.S, was scheduled for September 9 and will happen instead on September 29. Trading will start on September 30, according to a memo sent to its members this morning and seen by The Wall Street Journal.

The memo continued: “We are currently working very closely with regulators in order to achieve both recognition and a successful CME Europe launch with its broad array of FX products.”

A CME spokesman confirmed the contents of the memo but declined to comment further. A spokesman for the UK’s Financial Conduct Authority declined to comment.

CME Europe will target clients in Europe and Asia as it faces intensifying competition from the planned takeover of NYSE Euronext by IntercontinentalExchange, which both have large U.K.-based futures trading platforms.

It will initially start trading in 30 contracts including futures tied to the euro, sterling, U.S. dollar, yen, Swiss franc, Canadian dollar and other currencies. CME Group already has a large FX franchise in the U.S. and wants to bolster its European presence in the contracts. It will be based in London.

The futures bourse took the unusual step of announcing a launch date of September 9 before obtaining regulatory approval from the FCA. Speaking to MoneyBeat’s sister title Financial News last week, Bob Ray, CME Europe’s chief executive, said that move was designed to offer a degree of certainty to help customers get ready.

CME’s plans are partly a response to a G20-led regulatory push to trade more derivatives on exchange and through central clearing. The rules created new opportunities for market operators to expand by offering new products that have traditionally been traded privately between banks. The rules will hit the majority of the FX derivatives market, which was worth $67.35 trillion at the end of 2012, according to the Bank for International Settlements.

However, it is likely to face competition from rival Deutsche Börse-owned derivatives exchange Eurex. which said it is to launch FX derivatives on October 7.

–write to Anish Puaar, anish.puaar@dowjones.com and Tim Cave, timothy.cave@dowjones.com. This story first appeared on sister title Financial News’s website.